US aims to talk about currency; China sets limits

AFP, WASHINGTON

The US said it will raise concerns with China from currency values to human rights at talks next week in Washington, but Beijing in turn set limits on how far the discussions could go.

The world’s two largest economies will sit down on Monday for the annual Strategic and Economic Dialogue, the main forum between the two countries whose relations have become increasingly complex as China’s role in the world rises.

US accusations that China is artificially keeping its yuan low have long bedeviled talks, but David Loevinger, a senior US Treasury Department official, said we “absolutely see a change in tone” from China as it confronts inflation.

“Next week, we are going to press China to let its exchange rate adjust at a faster pace to correct its still substantial undervaluation,” he said.

China, he said, “continues to intervene massively in foreign exchange markets to constrain the appreciation of its currency.”

However, in Beijing yesterday, Chinese officials made clear that while they were willing to talk about currency policy, they would not be pushed on the pace of appreciation.

“On these issues, to be frank with you, we have different views that make discussions necessary,” Chinese Vice Finance Minister Zhu Guangyao (朱光耀) told reporters, adding that exchange rate policy was China’s sovereign right.

The yuan has risen 5 percent against the US dollar in the past year.

The US and other trading partners have charged that China has kept the yuan below its true value to make exports cheaper, fueling a manufacturing boom that has led to soaring growth over the past decade.

However, dynamics have changed in recent months as China grows concerned about inflation. China’s consumer prices rose 5.4 percent year-on-year in March —- the fastest pace since July 2008 and well above the government’s target of 4 percent this year.

Pressure has also subsided in Washington after the Republican Party won last year’s congressional elections in which many candidates from US President Barack Obama’s Democratic Party blamed China’s trade practices for US economic woes.

Nonetheless, US officials say that they have a series of economic concerns with China. On Wednesday, US Commerce Secretary Gary Locke (駱家輝) warned starkly that China was making life more difficult for US businesses through its regulations.

While seeing progress on the currency issue, US policymakers have charged that China’s human rights record is deteriorating as the country mounts its biggest clampdown on dissent in years.

Apparently concerned over democracy uprisings in the Arab world, China in recent weeks has rounded up dozens of critics, including high-profile artist Ai Weiwei (艾未未), whose outspoken views had been begrudgingly tolerated in the past.

Kurt Campbell, the US assistant secretary of state for East Asia, said that they would raise human rights concerns “directly, honestly and openly” with visiting Chinese officials.

“We ask Chinese interlocutors for explanations about disappearances, about arrests and legal procedures that we feel are either lacking or inappropriate,” he said.